Archer +D15:K79Electronics Companys actual sales and purchases for April and May are shown here along with forecasted
sales and purchases for June through September.
	Sales	Purchases
April (actual)	$370,000	$155,000
May (actual)	350,000	145,000
June (forecast)	325,000	145,000
July (forecast)	325,000	205,000
August (forecast)	340,000	225,000
September (forecast)	380,000	220,000
The company makes 20 percent of its sales for cash and 80 percent on credit. Of the credit sales, 50
percent are collected in the month after the sale and 50 percent are collected two months later.
Archer pays for 20 percent of its purchases in the month after purchase and 80 percent two months after.
Labor expense equals 15 percent of the current months sales. Overhead expense equals $12,500 per
month. Interest payments of $32,500 are due in June and September. A cash dividend of $52,500 is
scheduled to be paid in June. Tax payments of $25,500 are due in June and September. There is a
scheduled capital outlay of $350,000 in September.
Archer Electronicss ending cash balance in May is $22,500. The minimum desired cash balance is $10,500.
Show a schedule of monthly cash receipts, monthly cash payments, and a complete monthly cash budget
with borrowing and repayments for June through September. The maximum desired cash balance is $50,500.
Excess cash (above $50,500) is used to buy marketable securities. Marketable securities are sold before
borrowing funds in case of a cash shortfall (less than $10,500).

Solution
Problem 4-26
Instructions
Archer Electronics
Cash Receipts Schedule
	April	May	June	July	Aug	Sept
Sales
Credit sales (80%)	FORMULA	FORMULA	FORMULA	FORMULA	FORMULA	FORMULA
Cash sales (20%)	FORMULA	FORMULA	FORMULA	FORMULA	FORMULA	FORMULA
Collections (month after sale) 50%		FORMULA	FORMULA	FORMULA	FORMULA	FORMULA
Collections (second month after sale) 50%			FORMULA	FORMULA	FORMULA	FORMULA
Total cash receipts			FORMULA	FORMULA	FORMULA	FORMULA
Archer Electronics
Cash Payments Schedule
	April	May	June	July	Aug	Sept
Purchases
Payments (month after purchase20%)		FORMULA	FORMULA	FORMULA	FORMULA	FORMULA
Payments (second month after purchase80%)			FORMULA	FORMULA	FORMULA	FORMULA
Labor expense (15% of sales)			FORMULA	FORMULA	FORMULA	FORMULA
Overhead
Interest payments
Cash dividend
Taxes
Capital outlay
Total cash payments			FORMULA	FORMULA	FORMULA	FORMULA
Archer Electronics
Cash Budget
		June	July	August	September
Cash receipts
Cash payments
Net cash flow		FORMULA	FORMULA	FORMULA	FORMULA
Beginning cash balance			FORMULA	FORMULA	FORMULA
Cumulative cash balance		FORMULA	FORMULA	FORMULA	FORMULA
Monthly borrowing or (repayment)					FORMULA
Cumulative loan balance					FORMULA
Marketable securities purchased		FORMULA	FORMULA	FORMULA
(sold)					FORMULA
Cumulative marketable securities		FORMULA	FORMULA	FORMULA
Ending cash balance		FORMULA	FORMULA	FORMULA	FORMULA

Please include Excel formulas with solution.